problem and solution 14-47

problem and solution 14-47 - Problem 14- 47 Casting...

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Problem 14- 47 Casting Technology Resources has purchased 10,000 pumps annual from Kobec, Inc. Because the price keeps increasing and reached $ 68-00 per unit last year. The Company’s management has asked for an estimate of the cost of the manufacturing the pump in house facilities. The company makes stamping s and castings and has little experience with products requiring assembly. The engineering and manufacturing and accounting departments have prepared report for management that includes the following estimate for an assembly run of 10,000 pumps. Additional production employees would be hired to manufacture the pumps but no additional equipment, space, supervision would be needed. The report states that the total costs for 10,000 units are estimated at $ 957,000 or $ 97.50 per unit. The current purchase price is $ 68.00. So the report recommends continued purchase of the product. Components (outside purchase) $ 120,000 Assembly labor 300,000 Manufacturing Overhead 450,000 General Administrative
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This note was uploaded on 02/29/2012 for the course E 101 taught by Professor Sfere during the Spring '12 term at Abilene Christian University.

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problem and solution 14-47 - Problem 14- 47 Casting...

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